HSBC increases dividend following record profit

The MSE Equity Price Index rose by 0.39% to 3,758.776 points as the gains in HSBC, BOV, and Hili Properties outweighed the declines in MIA and Farsons. Meanwhile, three other equities closed unchanged as today’s trading activity in local equities amounted to €0.37 million. Download today’s Equity Market Summary.

HSBC Bank Malta plc was today’s most actively traded equity as it surged by 4.6% to a four-year high of €1.36 across twelve trades totalling 163,215 shares. Today, HSBC Malta published its financial results for 2023. Net interest income increased by 81% to €195.8 million, driven by the additional increases to the ECB’s overnight deposit facility which boosted income from excess liquidity. Excluding insurance operations, non-interest income dropped by 11.4% to €27.1 million, while HSBC Life Assurance (Malta) Limited reported a profit before tax of €6.2 million. The financial performance was also boosted by the release of ECL’s amounting to €4.6 million, which however was lower than the release of €9.6 million in the previous year. Overall, HSBC Malta reported a profit before tax of €133.9 million, which is more than double the pre-tax profit of €55.6 million generated in 2022. The net profit figure for the year amounted to a record of €86.8 million (equivalent to €0.241 per share) which translates into a return on average equity of 17.1%. The Board of Directors is recommending a final net dividend of €0.0585 per share. The dividend will be paid on 25 April 2024 to all shareholders as at the close of trading on 14 March 2024 subject to approval by the Annual General Meeting scheduled for 18 April 2024. Coupled with the net interim dividend of €0.039 per share paid in September 2023, the total net dividend attributable for the 2023 financial year amounts to €0.0975 per share, which represents a payout ratio of 40% (2022: 35%).

Also in the banking sector, Bank of Valletta plc moved 0.8% higher to the €1.32 level after recovering from an intraday low of €1.30 (-0.8%) over fifteen deals amounting to 88,303 shares.

Hili Properties plc rebounded by 16.9% to an almost one-month high of €0.214 on two trades totalling 23,500 shares. Yesterday, Hili Properties announced that it has concluded the sale of the retail complex centre located in Dzelzavas Street Riga, Latvia for a total consideration of €7 million. Hili Properties explained that the sale is in line with its strategy to optimise its portfolio and achieve greater capital efficiency, ensuring positive returns for its shareholders and investors.

On the other hand, Malta International Airport plc fell by 2.6% to the €5.55 level over six deals totalling 5,319 shares.

Also among large companies by market value, Simonds Farsons Cisk plc shed 4.3% to the €6.70 level as 210 shares changed hands.

APS Bank plc traded flat at the €0.545 level over three trades amounting to 2,050 shares.

Malita Investments plc held the €0.492 level on a single trade of 4,000 shares. Last Saturday, Malita published a Prospectus following regulatory approval in connection with a 4-for-9 rights issue. An amount of up to 65,825,806 new ordinary shares are offered at €0.50 per share. The net proceeds from the Rights Issue, estimated at €32.5 million, are principally earmarked to part-finance the required capital expenditure for the ongoing Affordable Housing Project. The offer period opens on Wednesday 28 February 2024 until Friday 15 March 2024.

International Hotel Investments plc held the €0.462 level on muted activity.

The RF MGS Index remained relatively unchanged at 888.755 points. Today, the German government released a report that projects a 0.2% growth for the current financial year, which is less than the previously forecasted figure of 1.3%. The German Economy Minister commented that the economy is emerging from crisis slower than expected because of high interest rates as well as a weakening global economy. Furthermore, Germany’s shortage of skilled workers is also anticipated to worsen in the coming year. Meanwhile, data released in the US showed that during the past week mortgage rates reached the highest level since last December, resurfacing above 7%. Moreover, the number of Americans applying for a loan fell to the lowest level since early November 2023.

This report contains public information only and is not to be construed as investment advice or an offer to buy or sell any securities. Information contained herein is based on data obtained from sources considered to be reliable, but no representations or guarantees are made with regard to the accuracy of the data. Stock markets are volatile and subject to fluctuations which cannot be reasonably foreseen. Past performance is not necessarily indicative of future results. Rizzo, Farrugia & Co. (Stockbrokers) Limited is a company licensed to undertake investment services in Malta by the MFSA under the Investment Services Act, Cap—370 of the Laws of Malta and a member of the Malta Stock Exchange.